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Why is nomination necessary in bank accounts?


Nomination is a must when it comes to all forms of bank accounts and even fixed deposits. If there is a nomination, bank would simply pay-off the amount in the balance of the deceased's account to the nominated person.


This means that banks would not ask for succession certificate or other documents to verify claims of legal heirs. Please remember, that a death certificate is a must in every case.

Why is nomination necessary in bank accounts?

Nomination facility simplifies the procedure for settlement of claims of deceased depositors as banks get the authentication to whom dues should be paid.

However, nomination facility is not mandatory while opening accounts or fixed deposits or locker. Hence, investors should insist for a nomination form as this would make life simpler for the person inheriting the deposits or account of the deceased.

Nomination can be done by just filling the form and submitting to your respective bank. A nominee could be anyone who is financially trustworthy, can be a family member, relative or friend.

One can even nominate a minor, provided the guardian will sign on behalf of the minor nominee and in addition there should be a name and photograph of the nominee along with the name, address and the photograph of the guardian.


With nomination

The balance outstanding will be paid to the nominee on verification of his/her identity (such as Election ID Card, PAN Card, Passport etc.) and proof of death of depositor.

Without Nomination

The balance outstanding will be paid to the legal heirs (or any one of them as mandated by all of the legal heirs) on verification of the authority of the legal heirs and proof of death of depositor.

Features of nomination

  • Bank offers nomination facility in deposit accounts, safe deposit lockers, articles in safe custody, etc.
  • Nomination can be made in favour of one individual only.
  • Nomination so made can be cancelled or changed by the account holder/s any time.
  • Nomination is also available to a sole proprietory concern account.
  • A non - resident can be nominated as a nominee in a resident account.
  • Only one individual can be nominated for one account.

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